FILE - A"SOLD" sign decorates the lawn of a new house in Pearl, Miss., Sept. 23, 2021. U.S. home loan applications are at the lowest level in decades, the latest evidence that rising mortgage rates and home prices are shutting out many aspiring homeowners. U.S. home loan applications are the lowest in decades as evidence mount that rising mortgage rates and home prices are shutting out many aspiring homeowners.
The MBA's home loan application index shows that home purchase loans fell 2.1% last week from the prior week to a seasonally adjusted reading of 141.9. That's down about 28% from a year earlier and represents the lowest level for the index since April 1995. Mortgage rates have been climbing in recent weeks, echoing a steady rise in the 10-year Treasury yield, which lenders use as a guide to pricing loans.
High rates can add hundreds of dollars a month in costs for borrowers, limiting how much they can afford in a market already unaffordable for many Americans. They also discourage homeowners who locked in low rates two years ago from selling, a trend that's helped keep the inventory of previously occupied U.S. homes on the market at near-record lows.